Leatherman Tool Group, Inc.

TERMS AND CONDITIONS OF PURCHASE

1. The Parties and the Agreement
   1. The Leatherman Tool Group, Inc. Terms and Conditions of Purchase is an integrated agreement between Leatherman Tool Group, Inc. (“LTG” or “Leatherman”) and Supplier consisting of these Terms and Conditions.
   2. The term “Supplier” shall mean the supplier designated in the purchase order and any successor thereof.
   3. Every written purchase order (“PO” or “Order”) submitted by LTG is subject to this agreement. LTG agrees to purchase and Supplier agrees to supply goods (“Goods”) under this agreement as valid consideration for the mutual promises herein.
2. Acceptance and Rejection
   1. Acceptance of this Purchase Order, commencement of Work or shipment of goods shall be considered acceptance of, and agreement to, of all terms and conditions herein. No agreement, understanding or proposal for additional terms (whether or not included in supplier’s acknowledgement) shall be binding unless set forth in writing and signed by both parties.
   2. No oral promises or oral orders shall be considered part of this Agreement.
3. Payment Terms
   1. All PO’s will be issued at payment terms of 2% 10, Net 45. Any changes to these payment terms must be included in the PO or expressly agreed upon in writing by an authorized employee of LTG prior to issuance of PO.
   2. Supplier will send immediately after shipment by electronic means, U.S. Postal service or Courier Service an invoice for the goods or service listing the quantity, purchase price, purchase order number, description and any other reasonable applicable references for the goods or service. LTG is not liable for payment of any invoice received more than one hundred eighty (180) days after receipt of goods.
4. Title, Shipping and Risk of Loss
   1. All POs will be designated FOB destination unless otherwise indicated in the PO or expressly agreed upon in writing by an authorized employee of LTG. Notwithstanding the freight terms used, no liability will be incurred by LTG and risk of loss shall not pass to LTG until legal title passes upon acceptance after inspection at the destination.
   2. Signing of a bill of lading or delivery receipt shall not constitute acceptance or a waiver of rights or remedies for any breach.
   3. If freight is charged to LTG then all goods or materials must be packaged and classified to take advantage of the lowest applicable shipping rate. Supplier will be charged back for excess freight costs due to due to shipping other than specified.
   4. Foreign shipments must be preceded by all documentation necessary to comply with the importing countries import laws. All documentation should be forwarded to the attention of the Logistics Manager at LTG.
5. Price Changes
   1. Supplier may not increase a price specified on a PO unless prior written approval is obtained from LTG. An approved price increase shall become effective ninety (90) days after Supplier’s receipt of such approval from LTG.
6. Warranties and Guarantees
   1. Supplier represents and warrants that: (a) Supplier is financially solvent and has the ability to perform its obligations hereunder; and (b) the person executing this document is a duly authorized officer or representative of Supplier with the authority to enter into and bind Supplier to the Terms and Conditions of Purchase.
   2. Supplier will perform the services in a manner consistent with that level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions in the same locale. Supplier represents and warrants that all items within the scope of the inspection shall conform to all applicable laws and codes and shall be in conformance with all applicable permits.
7. Indemnification and Product Liability
   1. Supplier shall indemnify and hold harmless LTG from any claims, suits, judgments, fees and costs (including reasonable attorney's fees) to the extent or arising out of the Supplier’s negligent performance of the services purchased hereunder including death, personal injury, damage to property, or the infringement of any patent, copyright, trade secret design, trademark or other intellectual property right of a third party.
8. Insurance
   1. Supplier shall maintain Commercial General Liability Insurance on an occurrence basis with limits of not less than one million dollars ($1,000,000). Leatherman Tool Group, Inc. and Timberland Development Co., its parent, affiliates and subsidiaries shall be named as an additional insured. Supplier's insurance must be the primary policy with respect to any loss. Supplier will have its insurer provide LTG with a current Certificate of Insurance evidencing the required coverage, as well as renewal certificates at least thirty (30) days prior to the expiration of coverage. Additionally, Supplier and its insurer shall provide to LTG thirty (30) days prior written notice of non-renewal, cancellation or other change in coverage which may impair or otherwise affect LTG's rights. Supplier’s obligations under this Section 7 shall in no way affect the indemnification, remedy or warranty provisions set forth in this agreement.
9. Termination, Cancellation and Returns
   1. LTG reserves the right to terminate or cancel any PO in whole or in part at any time before receipt of the Goods without incurring any liability.
   2. Should Supplier fail to comply with any of the Terms or Conditions of Purchase, LTG may cancel the PO. Any failure to immediately discover the non-compliance of the Goods shipped under a PO shall not preclude LTG from later exercising its rights under this Section, provided that LTG gives prompt notice after such failure is reasonably discovered by LTG.
   3. LTG expressly retains its right to terminate and/or pursue a claim or charge-back with Supplier for shortage, damage, lack of timely shipment or other defect of freight that comes to LTG’s attention.
   4. LTG shall only be responsible to pay Supplier for PO’s accepted through the date of termination.
10. Intellectual Property
    1. Supplier acknowledges and agrees that all patents, designs, trade names, trademarks, copyrights, trade secrets, logos or work product owned or created by LTG is and shall remain the sole property of LTG. Supplier will provide requested specimens, samples, diagrams and signed documents to assist in perfecting LTG’s IP rights.
11. Miscellaneous Provisions
    1. Supplier understands and acknowledges that LTG is purchasing goods, materials or services in connection with production activities and that time is of the essence with respect to the delivery and provision of the PO. If at any time Supplier reasonably expects that delivery or performance, as applicable, is not expected to be made on-time, Supplier shall promptly notify LTG of the reason for and anticipated length of the potential delay and shall use its best efforts, at Supplier’s own cost and expense, to expedite delivery. Within five (5) business days after receipt of such notice, LTG may, without prejudice to any other rights or remedies, cancel all or any portion of its undelivered PO hereunder.
    2. Written Changes. There shall be no changes or modifications to the Terms or Conditions of Purchase or any PO unless agreed to in writing and signed by an authorized agent of each party.
    3. Fees and Expenses. All costs and expenses, including but not limited to attorney’s fees, incurred by LTG due to Supplier’s violations under any PO or these Terms and Conditions of Purchase will be charged to Supplier. Supplier agrees that LTG shall have the right to offset any such fees and expenses and Supplier expressly agrees to reimburse LTG for all such costs and expenses.
    4. Use of Name and Publicity. Supplier will not use LTG’s name, LTG IP, or make a claim that LTG endorses Supplier or Supplier’s Goods or put forth any press release or public statement regarding LTG or these Terms and Conditions of Purchase without LTG’s prior written consent.
    5. Supplier agrees and represents that it is an equal opportunity employer and does not discriminate on the basis of race, color, religion, age, sex, disability, origin, or any other protected classification under federal state or local law or ordinance. Supplier further acknowledges the provisions of Executive Order 11246.503 of the Rehabilitation Act of 1973, as amended and the Vietnam Era Veteran’s Readjustment Act as amended and agrees to fully comply with any provisions of those statutes or orders to which it is obligated.
    6. Fair Labor Standards Act. Supplier agrees and certifies that the goods or materials to be furnished or manufactured hereunder have been or will be produced in compliance with all applicable requirements of Sections 6, 7 and 12 of the United States of America Federal Fair Labor Standards Act, as amended, the regulations of the U.S. Department of Labor issued under Section 14, and the U.S. occupational safety and health act. Assurance that the goods and materials were so produced shall be given to LTG by the supplier if requested.
    7. Assignments. Any PO or any part thereof shall not be assigned by the Supplier, or performance hereunder delegated or sublet, without first obtaining LTG’s written approval.
    8. Labor Dispute. Supplier shall promptly notify LTG of any actual or threatened labor dispute that may delay performance of any purchase order.
    9. Governing Law and costs. These Terms and Conditions of Purchase and any PO hereunder and all disputes arising out of the parties relationship will be governed by and construed in accordance with the laws of the State of Oregon. Severability. If any part or parts of these Terms and Conditions of Purchase are held to be invalid, the remaining parts of this agreement will continue to be valid and enforceable.